Business and consumers in the country shared mixed views on how the economy will fare in the coming months, a Bangko Sentral ng Pilipinas (BSP) survey showed.
Results of the Central Bank’s quarterly survey showed that local firms became less optimistic for the second and third quarter of 2021 while consumers were more upbeat with their prospects for the year.
Business confidence weakened to post a confidence index (CI) of 1.4 percent from 17.4 percent in the first quarter of 2021.
The confidence index is computed as the percentage of optimistic respondents minus the percentage of pessimistic respondents in the local economy. A lower confidence index means the pessimists outweigh the optimists during the survey period.
The BSP said firms largely blamed the slump in their confidence to the upsurge of Covid-19 cases in the country and the re-imposition of stricter community quarantine. They also cited the elevated inflation rate due to supply constraints as an area of concern.
Businesses were also worried about the pace of the vaccination roll-out for the current quarter as well as the expected seasonal factors for the third quarter such as the close of the milling season and the usual slack in demand for power and construction materials during the rainy season.
For the third quarter, firms’ CI declined to 31.4 percent from the previous quarter’s survey result of 42.8 percent.
In contrast, however, consumer sentiment continued to improve in the second quarter of the year as the overall CI increased to -30.9 percent from -34.7 percent in the first quarter.
Consumers attributed their less gloomy outlook on their expectations of more jobs and permanent employment and additional or higher income.
Filipino consumers also said their optimism hinged on effective government policies and programs to address pandemic-related concerns such as the availability of vaccines, provision of financial assistance, and easing of quarantine restrictions.
Consumer confidence was also upbeat for the third quarter of the year. In particular, the CI for July to September reverted to positive 1.3 percent from the first quarter survey result of -2.2 percent.
The second quarter business expectations survey (BES) was conducted during the period April 7 to May 27 while the consumer expectations survey (CES) was conducted during the period April 21 to May 1.